Allocating inventory based on allocation priorities

ABSTRACT

The present invention provides a method for allocating inventory of a supplier to contracted requestors based on allocation priorities. The supplier sets up a distribution arrangement (contract) with each requestor interested in obtaining inventory. Each inventory record identifies a pool of available inventory. Under a distribution arrangement (between the requestor and the supplier), one or more availability records are associated (by the supplier) with the distribution arrangement. An availability record identifies an inventory record from which inventory will be allocated (to a requestor). A supplier allocates inventory (to a requestor) from a pool of inventory identified by an inventory record associated with an availability record (the availability record indicates that inventory is to be allocated from the pool of inventory identified with the inventory record) assigned (by the supplier) under a distribution arrangement. Each availability record indicates an allocation priority relative to other availability records.

FIELD OF THE PRESENT INVENTION

[0001] This invention relates to allocating inventory, and morespecifically to allocating inventory from a pool of available inventoryto requestors based on allocation priorities.

BACKGROUND

[0002] Suppliers of inventory (organizations that supply product and/orservices such as, distributors, wholesalers, or manufacturers and thelike) allocate inventory by reserving portions of inventory toorganizations or entities that request inventory (such as resellers, endusers, renters, buyers of product and/or services, hereinafter referredto as ‘requestors’). Inventory can be items such as fish, fruit,computer components, or pens and pencils and the like, or can beservices.

[0003] From time to time, a supplier of inventory may unfortunatelyreserve a portion of inventory to slow-turnover requestors (that isrequestors that very slowly turnover their reserved portion ofinventory). Sometimes, the supplier may be fortunate to reserve anotherportion of inventory to fast-turnover requestors (that is requestorsthat quickly turnover their reserved portion of inventory). The portionof inventory reserved for slow-turnover requestors will become stagnantwhile the portion of inventory reserved for fast-turnover requestorsavoids becoming stagnant. The supplier (hereinafter referred to as‘distributor’) of inventory is prevented from reassigning reservedportions of stagnant inventory over to quick-turnover requestors becausethe distributor will then suffer the consequence of souring a businessrelationship with a desirable, fast-turnover requestor (who expects toreceive fresh inventory). When portions of reserved inventory becomestagnant, the distributor will experience increased costs for carryingthe stagnant inventory and then might be unable to recuperate from theselosses when the stagnant inventory is eventually sold. Quick-turnoverrequestors can become disadvantageously prevented or blocked fromobtaining inventory allocated or reserved for slow-turnover resellers(thus potentially creating a backlog for the quick-turnover requestor).It is not desirable for a distributor to endure cost increases whenportions of reserved inventory age and are not turned over (that ispicked or removed) quickly. Additionally, requestors and distributorsmay be required to each individually operate an inventory managementsystem, which would be an expensive proposition for the requestors.Accordingly, an improvement for allocating inventory would bebeneficial.

SUMMARY

[0004] The present invention enables a supplier or distributor ofinventory to allocate inventory from available pools of inventory torequestors based on a priority sequence identified by the supplier. Adistribution arrangement is setup between the supplier and eachrequestor. The distribution arrangement specifies that the supplier willallocate inventory to the requestor identified in the distributionarrangement. Subsequently, the supplier (under each distributionarrangement) associates one or more availability records wherein eachassociated availability record identifies one inventory record (eachinventory record identifies one pool of inventory) from which inventorywill be allocated. Each availability record includes an allocationpriority indicator for indicating relative priority between otherassociated availability records. Inventory is allocated from aninventory record identified by an availability record having a preferredpriority indication. The priority indicators indicate a preferredpriority sequence for allocating inventory from available pools ifinventory. A distribution arrangement specifies a preferred prioritysequence for allocating inventory.

[0005] Once a supplier receives a shipment of inventory, an inventoryrecord is created for identifying the received shipment of inventory (ora portion of inventory). An inventory record specifies the currentquantity of available inventory, the cost, and date the inventory wasreceived. Once all the pools of available inventory are identified by aninventory record, availability records are created for identifying oneinventory record. An availability record indicates that inventoryidentified by an inventory record is allocatable under a particulardistribution arrangement. Each availability record also indicatespriority relative to other availability records in which allocation ofinventory is based on the priority level of an availability record.

[0006] When a requestor requests inventory from a supplier, the supplierrefers to an availability record under the distribution arrangementbetween supplier and requestor, and subsequently picks allocatedinventory associated with the availability record having the preferredpriority indication. The supplier may use one or more availabilityrecords for identifying one or more existing inventory records and thuspermit allocation of inventory depending on the priority level if anavailability record.

[0007] In a first aspect of the invention there is provided a method ofselectively apportioning inventory of supplies of a supplier tocontracted entities having distribution arrangements with the supplier,including creating a record of supplies received in the inventory, fromthe record of receipt creating availability records of the receivedsupplies for the contracted entities in accordance with the distributionarrangements, and allocating supplies from the inventory to a contractedentity submitting an order for supplies in accordance with anavailability record of the supplies for the contracted entity.

[0008] In a second aspect of the invention there is provided a systemfor selectively apportioning inventory of supplies of a supplier tocontracted entities having distribution arrangements with the supplier,the system including means for creating a record of supplies received inthe inventory, means for creating availability records of the receivedsupplies from the record of receipt for the contracted entities inaccordance with the distribution arrangements, and means for allocatingsupplies from the inventory to a contracted entity submitting an orderfor supplies in accordance with an availability record of the suppliesfor the contracted entity.

[0009] In a third aspect of the invention there is provided computerprogram product for use in a computer system operatively coupled to acomputer readable memory, the computer program product including acomputer-readable data storage medium tangibly embodying computerreadable program code for directing the computer to selectivelyapportion inventory of supplies of a supplier to contracted entitieshaving distribution arrangements with the supplier, the computer programproduct including code for instructing the computer system to create arecord of supplies received in the inventory, code for instructing thecomputer system to create availability records of the received suppliesfrom the record of receipt for the contracted entities in accordancewith the distribution arrangements, and code for instructing thecomputer system to allocate supplies from the inventory to a contractedentity submitting an order for supplies in accordance with anavailability record of the supplies for the contracted entity.

[0010] A better understanding of these and other embodiments of thepresent invention can be obtained with reference to the followingdrawings and description of the preferred embodiments.

BRIEF DESCRIPTION OF THE DRAWINGS

[0011] The embodiments of the present invention will be explained by wayof the following drawings:

[0012]FIG. 1 depicts an inventory allocation environment;

[0013]FIG. 2 depicts an inventory allocation system embodying aspects ofthe present invention;

[0014]FIG. 3 depicts operations for allocating inventory related to theinventory allocation system of FIG. 2; and

[0015]FIG. 4 depicts operation for setting up the inventory allocationsystem of FIG. 3.

DETAILED DESCRIPTION

[0016] Background

[0017]FIG. 1 depicts distribution environment 100 including inventorymanagement (IM) system 102 operated by a distributor, InventoryManagement system 106A and purchase order (PO) system 108A both operatedby reseller ‘A’, Inventory Management system 106B and Purchase Ordersystem 108B both operated by reseller ‘B’. Inventory Management system102, and Purchase Order systems 108A, 108B are operatively networked vianetwork 104 such as the Internet. It will be appreciated that anInventory Management system can be a subsystem of a larger businesssystem such as an ERP (Enterprise Resource Planning) system. ERP systemsgenerally include integrated subsystems each dedicated for managingspecific facets of business operations such as an inventory subsystem, aplanning subsystem, a manufacturing subsystem, a sales subsystem, or anaccounting subsystem.

[0018] Resellers ‘A’ and ‘B’ use their respective Purchase Order systems108A, 108B to place purchase orders. Purchase Order system 108A mayallocate inventory from reseller ‘A’ Inventory Management system 106A,may allocate inventory from a distributor's Inventory Management system102, or may initially allocate inventory from reseller ‘A’ InventoryManagement system 106A and then proceed to allocate inventory from thedistributor's Inventory Management system 102 (for the case whenInventory Management system 106A cannot fulfill any purchase orders).Similarly, Purchase Order system 108B may allocate inventory fromreseller ‘B’ Inventory Management system 106B or may allocate inventoryfrom the distributor's Inventory Management system 102. For the casewhen the distributor receives requests to allocate inventory, InventoryManagement system 102 arranges for the fulfillment of the receivedpurchase orders and may transmit messages pertaining to purchase and/orshipment confirmations back to respective Inventory Management systems106A, 106B.

[0019] Inventory Management system 102 includes memory (not depicted)for maintaining inventory records 110 and 112. Inventory record 110indicates or depicts a quantity of inventory received on a specific date(such as September 1). Inventory record 112 indicates another quantityof inventory received on another specific date (such as September 3).When a distributor receives a shipment of inventory, the distributorallocates inventory by exclusively reserving portions of the receivedshipment of inventory to corresponding resellers. For example, portions‘A’, ‘B’, and ‘C’ of inventory record 110 represent portions ofinventory reserved for resellers ‘A’, ‘B’, and ‘C’ respectively(reseller ‘C’ is not depicted). Portions ‘E’, ‘F’, and ‘G’ of inventoryrecord 112 represent portions of inventory reserved for resellers ‘A’,‘B’, and ‘C’ respectively. Inventory related to inventory record 110 isolder than inventory related to inventory record 112.

[0020] Preferred Embodiments

[0021]FIG. 2, depicts an inventory allocation environment 200 includingresellers 202 and 204, distributors 206 and 216, computer systems 201and 224. In a preferred embodiment, distributors 206, 216 operatecomputer system 201, 224 respectively to allocate inventory forfulfilling purchase orders related to various resellers (i.e.,environment 200 is operated or implemented in a distributed computingenvironment).

[0022] In an alternative embodiment (not depicted), distributors 206 and216 interact with a single computer system (i.e., environment 200 isoperated on a computer system that accommodates a plurality ofdistributors in which another business entity owns and/or operates theinventory management system, and the plurality of distributors pay userfees for using the computer system. User fees represent one businessmodel. For example, another business model does not involve user fees inwhich a manufacturer may provide inventory allocation service forreseller channels. Reseller 202 is prepared to place purchase orderswith distributor 206. Reseller 204 is prepared to place purchase orderswith distributor 206 and/or distributor 216. In a preferred embodiment,resellers 202 and 204 can be e-commerce stores operating from within anadapted version of Webshpere™ Commerce Suite supplied by IBM of Armonk,N.Y.

[0023] Computer system 201 includes computer-readable memory 203operatively coupled to a CPU (Central Processing Unit, not depicted).Memory 203 stores computer software program 207, distributionarrangements 208, 210, availability records 212A, 212B, 214A, 214B, andinventory records 220, 222. Computer software program 207 includescomputer-programmed instructions for instructing or directing the CPU toachieve specific tasks or operations as depicted in FIG. 3 and asdescribed in the following description.

[0024] Computer system 224 includes computer-readable memory (notdepicted) operatively connected to a CPU (not depicted). The memorystores distribution arrangement 218 and computer software program 207(however, program 207 is not depicted as being stored in computerprogram system 224).

[0025] Distribution arrangements 208, 210 specify inventory allocationpriorities to distributor 206 for fulfilling purchase orders receivedfrom resellers 202, 204 respectively. Distribution arrangement 218specifies inventory allocation priorities to distributor 216 forfulfilling purchase orders received from reseller 204.

[0026] Resellers 202 and 204 place or submit purchase orders (notdepicted) for purchasing inventory, such as pencils, from distributor206. Distributor 206 uses computer system 201 to select allocatedinventory for fulfilling received purchase orders. For the case whendistributor 206 receives purchase orders from resellers 202 and 204,distributor 206 removes inventory related to inventory records. Portionsof an inventory record are not specifically allocated to any specificresellers, as will be shown below. In an alternative embodiment, adistributor does not directly ship inventory to resellers, in which casethe distributor is a re-supplier for resellers.

[0027] Prior to placing or receiving any purchase orders, reseller 202and distributor 206 set up distribution arrangement 208 that specifies aFIFO picking method, and reseller 204 and distributor 206 set updistribution arrangement 210 that specifies a different, in this caseLIFO, picking method. Distribution arrangements 208 and 210 specify thatdistributor 206 agrees to sell and/or supply inventory to reseller 202,204 respectively. In a preferred embodiment, a distribution arrangementis valid or enforceable from a starting time to an ending time (forexample, a distribution arrangement can be valid from August 1 toDecember 31). In another preferred embodiment, a distributionarrangement specifies a method for picking or removing inventory relatedto various inventory records. Examples for picking or removing inventoryare FIFO (First In First Out) method and LIFO (First In Last Out)method. The FIFO method ensures that older inventory is picked untilcompletely exhausted before picking newer inventory. The LIFO methodensures that newer inventory is picked until completely exhausted beforepicking older inventory. In an alternative embodiment, resellers do notplace their purchase orders with a distributor, in which case theresellers pick or remove inventory controlled by the distributor.

[0028] Distributor 206 receives a shipment of inventory on November 1and subsequently creates inventory record 220. Inventory record 220represents a quantity of inventory which distributor 206 will use tofulfill purchase orders received from various resellers. For the casewhen distributor 206 decides to pick or remove inventory related toinventory record 220 to fulfill purchase orders received from resellers202 and 204, distributor 206 produces availability records 212A and 212Bthat are associated to respective resellers 202 and 204 (underrespective distribution arrangements 208 and 210). Availability records212A and 212B indicate that distributor 206 desires to fulfill purchaseorders received from resellers 202 and 204 respectively by picking orremoving inventory related to inventory record 220. In a preferredembodiment, portions of inventory related to inventory record 220 arenot specifically allocated or reserved for resellers, and that inventoryas a whole is allocated to one or more resellers (as deemed suitable bya distributor).

[0029] In a preferred embodiment, an availability record has anassociated priority number for indicating priority or preference forpicking inventory from the availability record versus picking frominventory related to other availability records. Availability record212A (which has a priority number of ‘0’) indicates that for the casewhen reseller 202 (which is associated with distribution arrangement208) places purchase orders for inventory, distributor 206 will pick orremove the inventory related to inventory record 220, and then arrangefor the shipment of the removed inventory to reseller 202 (beforepicking or removing inventory related to any other availability recordshaving a lower priority attribute that may exist under distributionarrangement 208). Availability record 212B (which has a priority numberof ‘0’) indicates that for the case when reseller 204 (which isassociated with distribution arrangement 210) places purchase orders forinventory, distributor 206 will pick or remove the inventory related toinventory record 220, and then ship the removed inventory to reseller204 (before picking inventory related to any other availability recordshaving a lower priority attribute that may exist under distributionarrangement 210).

[0030] It will be appreciated that specific portions of inventoryrelated to an inventory record are not expressly reserved for fulfillingpurchase orders from specific resellers. Any inventory related to aninventory record can be picked or removed for fulfilling purchase ordersreceived from resellers provided that a distributor has associated anavailability record under an appropriate distribution arrangementbetween the distributor and the resellers. By not specifically reservingportions of inventory for specific resellers, portions of inventory areprevented from becoming stagnant because the inventory is picked basedon a first-come-first-served basis when a purchase order is receivedfrom the resellers.

[0031] In an alternative embodiment, cost of inventory is associatedwith an inventory record. All inventory related to an inventory recordhave the same cost. For example, a shipment of 1,000 pencils has beenreceived by a distributor. The unit cost for a quantity of 750 pencilsis $1.00, and the unit cost for a quantity of 250 pencils is $1.10 (theprice increased, but the shipment includes the combination of expensiveand inexpensive pencils). In this case, the distributor would create forthe single physical shipment two distinct inventory records, in whicheach distinct inventory record will have a related per unit cost.

[0032] There could be other reasons why a single shipment may be brokendown into multiple inventory records. For example, a distributorreceives a large shipment of 100,000 pencils. The distributor has somedistribution arrangements that limit the quantity of inventory availableto 10,000 pencils. If such a huge shipment of inventory were related toa single inventory record, then all those resellers withlimited-quantity arrangements (that is restricted or limited as to themaximum quantity of pencils) could not be given access to such a singlelarge quantity of inventory. To limit resellers, a distributor maydecide to create 20 subgroups of inventory, in which each subgroupincludes 5,000 pencils and the subgroups of inventory are then relatedto various inventory records. For this case, the distributionarrangement provides a method for limiting quantity of inventory relatedto various inventory records.

[0033] A distribution arrangement is a record indicating that a resellermay allocate inventory from various inventory records (which are held orcontrolled by a distributor). The distribution arrangement can specify adistributor (that is an entity that manages or owns allocatableinventory records available under the distribution arrangement), areseller (that is an entity that has a right to pick or select inventoryrelated to various allocatable inventory records available under thedistribution arrangement), an indication of a start time (that is thetime the distribution arrangement becomes valid or effective), anindication of an end time (that is the time the distribution arrangementstops being effective or become invalid), a picking or an availabilitycustomization method (that is the manner in which inventory is to bepicked or removed from various groups of inventory), and a precedenceindicator (that is a distributor selection indication assigned by areseller for selecting a preferred distribution arrangement from a groupof available distribution arrangements based on a criteria, such aslowest cost supplier of inventory).

[0034] Resellers may create and modify precedence indicators related tovarious distribution arrangements available to the resellers. In apreferred embodiment, the precedence indicator is not created and/ormodified by the distributor. Alternatively, the precedence indicator iscreated and/or modified by the distributor, in accordance with apreference indicated by a reseller (that is on behalf of the reseller).

[0035] An availability record indicates that inventory has been madeavailable for allocation by a distributor, in which the availableinventory is related to an inventory record. An availability record iscreated under a distribution arrangement. The availability record has apriority indicator for indicating a sequence in which inventory is to bepicked from various groups of inventory. The priority of an availabilityrecord is normally set by the distributor, according to the picking oravailability customization method for the distribution arrangement, toindicate the order in which inventory is allocated for a reseller fromthe inventory records.

[0036] Distributor 206 receives another shipment of inventory onNovember 5 and subsequently creates inventory record 222 related to theshipment of inventory. Distributor 206 decides that to fulfill futurepurchase orders from resellers 202 and 204, distributor 206 will pick orremove inventory related to inventory record 222 in addition picking orremoving inventory related to inventory record 220 (that is there arenow several groups of inventory to pick therefrom). For the case whendistributor 206 desires to allow picking from inventory related toinventory record 222, distributor 206 produces availability record 212Band 214B to indicate that distributor 206 can also fulfill purchaseorders from resellers 202 and 204 (respectively) by removing inventoryrelated to inventory record 222. Now distributor 206 has severalavailable inventory records (such as inventory records 220 and 222) fromwhich to pick or remove inventory for fulfilling purchase ordersdepending on which availability records exist and the priorityindicators related to the availability records.

[0037] For the case when distributor 206 receives purchase orders forinventory from reseller 202 under distribution arrangement 208 and sinceavailability record 212A indicates a priority ‘0’ status andavailability record 214A indicates priority status ‘−1’, thendistributor 206 picks inventory related to inventory record 220 forfulfillment of the purchase order (because availability record 212A hasa related priority of ‘0’ which is the highest priority of theavailability records for this distribution arrangement. For the casewhen inventory record 220 indicates no more inventory is present,distributor 206 picks inventory related to inventory record 222 (becauseavailability record 214B has a related priority of ‘−1’ which is thehighest priority of the availability records associated with availableinventory for this distribution arrangement) for fulfillment of thepurchase order. Under a FIFO picking method, priorities are assigned toavailability records in such a way that newer availability records havelower priority. It will be appreciated that records that eventuallyindicate no inventory can be removed from computer system 201.

[0038] In the preferred embodiment, inventory related to a preferredinventory record is removed on the basis of the priority indicated foran availability record. For example, the manner in which inventory isremoved can be specified in distribution arrangement 208, which is setfor a FIFO picking method. For the case when distributor 206 prefers toremove inventory in the FIFO manner, inventory related to inventoryrecord 220 is entirely removed before removing any inventory related toinventory record 222 (because inventory record 220 is older thaninventory record 222). Once inventory related to inventory record 220 isdepleted, then inventory related to inventory record 222 can be removed.This is advantageous when distributor 206 wishes to deplete older oraged inventory before picking newer or fresher inventory. Olderinventory is indicated by an older date (such as November 1 forinventory record 220). Newer inventory is indicated by a newer date(such as November 5 for inventory record 222).

[0039] The priority of availability records is set to reflect a pickingmethod. Thus, the picking method is only looked at when inventoryrecords and the corresponding availability records are created. Duringinventory allocation (which is a performance-critical process since ithappens very frequently with a large volume of transactions) all thatneeds to be looked at is availability record priorities. These are meantto be already set up in such a way as to respect the appropriate pickingalgorithm.

[0040] Under the LIFO picking method, newer inventory will be picked anddepleted before picking older inventory. Availability record 214B (whichhas a priority indication of ‘1’ which indicates newest inventory)indicates that for the case when reseller 204 associated withdistribution arrangement 210 places purchase orders for inventory,distributor 206 will remove inventory related to inventory record 222(because related availability record 214B has a priority indication of‘1’). However, for the case when inventory record 222 indicates no morerelated inventory is available for picking, distributor 206 will pickinventory related to inventory record 220 (because the priority statusof availability record 212B is set to ‘0’ which indicates the nextavailable newest inventory). The manner in which inventory is picked bydistributor 206 is specified in distribution arrangement 210 related toreseller 204. For example, the manner of picking inventory is specifiedas the LIFO picking method.

[0041] An example for using the FIFO picking method is for the case whendistributor 206 wishes to pick inventory related to inventory record 220before picking inventory related to inventory record 222. Initially,inventory related to inventory 220 is picked until completely depleted.For the case when inventory has been completely depleted from inventoryrelated to inventory record 220, then inventory related to inventoryrecord 222 is picked. The LIFO picking method requires that newerinventory related to inventory record 222 is picked before inventoryrelated to inventory record 220 is picked.

[0042] It will be appreciated that the inventory (or portions ofinventory) related to inventory records 220 or 222 are not reserved foror allocated to any specific resellers. Rather, inventory related toinventory records are made available for picking provided that adistributor refers to availability records related to the specificresellers.

[0043] In the preferred embodiment, distribution arrangements furtherinclude precedence indicators. Reseller 204 can place purchase orderswith either distributor 206 or distributor 216. Distributor 206 andreseller 204 have previously set up distribution arrangement 210.Distributor 216 and reseller 204 set up distribution arrangement 218.Reseller may be motivated to place purchase orders with distributor 216because distributor 216 provides an incentive to reseller 204, such aslower-cost inventory or a sales incentive promotion (such as a free tripto Hawaii, or may reflect the distributor reliability). Reseller 204sets the precedence indicator related to distribution arrangement 218 toa value of ‘2’ to indicate that purchase orders will be initially placedwith distributor 216. Reseller 204 sets the precedence indicator relatedto distribution arrangement 210 to a value of ‘1’ to indicate thatpurchase orders will be placed with distributor 206 when distributor 216cannot fulfill any purchase orders. Higher precedence distributionarrangements are given preference.

[0044]FIG. 3 depicts operations of computer program 207 of FIG. 2 forallocating inventory. It is understood that the operations depicted inflowchart 300 will be performed by program 207 operating in computersystem 201 unless stated otherwise.

[0045] S302 indicates the start of operations of the IM system. S304indicates that IM system receives a request to purchase inventory. InS306, the IM system retrieves distribution arrangements related to theinventory specified in the purchase order. In S308, the IM systemdetermines whether the retrieved distribution arrangements havesufficient inventory to fulfill the request, and are valid orenforceable because the purchase order was received when the specifiedstart and stop times are still valid or acceptable. If no, processingcontinues to S310 (in which case the order is not fulfilled andprocessing stops because the purchase order was received either beforeor after the time that the distribution arrangements are valid). If yes,processing continues to S312 (in which case inventory will be selectedfrom inventory related to the inventory records because the purchaseorder was received during the time that the distribution arrangementsare enforceable or valid).

[0046] In S312, the IM system examines availability records related tothe selected distribution arrangements. In S314, the IM system selectsinventory related to inventory records from which to remove inventory(based on priority indicator related to the availability records). InS316, the IM system proceeds with arranging the shipping of inventoryfrom the selected inventory record. In S318, operations end.

[0047] In the preferred embodiment, a distribution arrangement canspecify a maximum quantity of inventory that can be allocated to areseller. For example, when the maximum quantity of inventory is 500 andthe received shipment of inventory has a quantity of 1000, then anavailability record cannot be used for assigning or allocating inventoryto the received shipment of inventory because the quantity (of thereceived shipment of inventory) is larger than the maximum quantitypermitted (by the distribution arrangement). In this embodiment, adistributor would need to either split the received inventory intosmaller chunks or increase the inventory limit for a reseller.

[0048] In an alternative embodiment, a distribution arrangement canspecify a precedence value so that a reseller can place their purchaseorder with a preferred distributor. For example, a reseller can have twodistributors with which to place purchase orders. The reseller mayassign a precedence value of ‘2’ to indicate a first preferreddistributor (with which to place purchase orders), and a precedencevalue of ‘1’ to indicate a second preferred distributor (with which toplace a purchase order when the first preferred distributor cannotfulfill a purchase order). When the reseller is ready to place apurchase order, the order will be placed with the distributor having thehighest precedence value. For the case when the distributor cannotfulfill the purchase order, then the purchase order is placed with thedistributor having the next highest precedence value.

[0049] It will be appreciated that the embodiments of the presentinvention can be implemented on a hosted computer environment or can beimplemented on a distributed computer environment.

[0050] Referring to FIG. 4, there is depicted operations of computerprogram 207 of FIG. 2 for directing the CPU related to computer system201 for setting up an allocation environment. It is understood that theoperations depicted in flowchart 300 will be performed by computerprogram 207 operating in memory of computer system 201 unless statedotherwise.

[0051] In S402, operations of computer program 207 begins. In S404,computer program 207 (stored in memory 203) is directed by distributor206 to setup and/or assign distribution arrangement 208 betweendistributor 206 and reseller 202, and to assign distribution arrangement210 between distributor 206 and reseller 204.

[0052] In S406, distributor 206 receives inventory or a shipment ofinventory. In S408, computer program 207 is directed by distributor 206to setup and/or assign an inventory record related to the receivedinventory. For example, distributor 206 assigns inventory record 220related to the received inventory record, which was received on November1.

[0053] In S410, computer program 207 is directed by distributor 207 tosetup and/or assign an availability record to the assigned distributionarrangement. For example, once inventory record 220 is assigned to thereceived inventory, availability record 212A is created and assigned todistribution arrangement 208 which would allow allocation of inventoryrelated to inventory record 220 for fulfillment of purchase ordersreceived from reseller 202. In S412, operations of computer program 207stops. It will be appreciated that flowchart 400 can be adapted todetermine whether operations S402, S404, S408, and S410 should beperformed prior to performing any of these operations. For example,prior to executing operation S408, flowchart 400 can include anoperation to determine whether there are any distributions agreementsthat an availability record can be assigned thereto (with corresponding‘yes’ and ‘no’ outcomes).

[0054] It will be appreciated that variations of some elements arepossible to adapt the invention for specific conditions or functions.The concepts of the present invention can be further extended to avariety of other applications that are clearly within the scope of thisinvention. Having thus described the present invention with respect tothe preferred embodiments as implemented, it will be apparent to thoseskilled in the art that many modifications and enhancements are possibleto the present invention without departing from the basic concepts asdescribed in the preferred embodiment of the present invention.Therefore, what is intended to be protected by way of letters patentshould be limited only by the scope of the following claims.

[0055] The present invention may be embodied in other specific formswithout departing from the spirit or essential characteristics thereof.Therefore, the presently discussed embodiments are considered to beillustrative and not restrictive, the scope of the invention beingindicated by the appended claims rather than the foregoing description,and all changes which come within the meaning and range of equivalencyof the claims are therefore intended to be embraced therein.

The embodiments of the invention in which an exclusive property orprivilege is claimed are defined as follows:
 1. A method of selectivelyapportioning inventory of supplies of a supplier to contracted entitieshaving distribution arrangements with said supplier, comprising:creating a record of supplies received in said inventory; from saidrecord of receipt creating availability records of said receivedsupplies for said contracted entities in accordance with saiddistribution arrangements; and allocating supplies from said inventoryto a contracted entity submitting an order for supplies in accordancewith an availability record of said supplies for said contracted entity.2. The method of claim 1 further comprising allocating portions of saidinventory to contracted entities submitting orders for said supplies inaccordance with availability records of said supplies for saidcontracted entities.
 3. The method of claim 1 wherein said availabilityrecords include one or more priority criteria determined in accordancewith said distribution arrangements between said supplier and saidcontracted entities.
 4. The method of claim 3 wherein said prioritycriteria may comprise one or more of the following factors: pricing ofsaid supplies; availability of supplies; quality of supplies; history ofdealings with said supplier; locations of said supplier; responsivenessof said supplier; and, delivery timing.
 5. A method of selectivelyapportioning inventories of supplies of a plurality of suppliers among aplurality of contracted entities having distribution arrangements withsaid plurality of suppliers, comprising: creating records of suppliesreceived in said inventories; from said records of receipt creatingavailability records of said received supplies for said contractedentities in accordance with said distribution arrangements; andallocating supplies from said inventories to said contracted entitiessubmitting orders for said supplies in accordance with availabilityrecords of said supplies for contracted entities.
 6. The method of claim5 wherein said availability records include one or more prioritycriteria determined in accordance with said distribution arrangementsbetween said suppliers and said contracted entities.
 7. The method ofclaim 6 wherein said priority criteria may comprise one or more of thefollowing factors: pricing of said supplies; availability of supplies;quality of supplies; history of dealings with said supplier; locationsof said supplier; responsiveness of said supplier; and, delivery timing.8. The method of claim 1 wherein said records are created and maintainedby said supplier.
 9. A method of selectively apportioning inventories ofsupplies of a plurality of suppliers for a contracted entity which maysubmit orders for said supplies, in which said contracted entity hasdistribution arrangements with said suppliers, and said suppliers haveavailability records of said supplies for said contracted entities inaccordance with said distribution arrangements, wherein saidavailability records include priority criteria, comprising: identifyingdistribution arrangements of said contracted entity with said suppliersfor said supplies; obtaining availability records for said supplies fromsaid suppliers; and submitting orders for selected amounts of saidsupplies to one or more selected suppliers in accordance with saidpriority criteria of said availability records.
 10. The method of claim9 in which said distribution arrangements of said contracted entityinclude a precedence rating for each supplier; and wherein saidcontracted entity obtains availability records from said suppliers inprecedence order.
 11. The method of claim 9 in which said distributionarrangements of said contracted entity include precedence ratings forsaid suppliers; and wherein said contracted entity places orders withsaid suppliers in precedence order.
 12. The method of claim 9 whereinsaid suppliers include other contracted entities that have distributionarrangements with other contracted entities.
 13. The method of claim 1wherein said distribution agreements indicate a period of timeindicating enforcement of said distribution arrangement.
 14. A systemfor selectively apportioning inventory of supplies of a supplier tocontracted entities having distribution arrangements with said supplier,said system comprising: means for creating a record of supplies receivedin said inventory; means for creating availability records of saidreceived supplies from said record of receipt for said contractedentities in accordance with said distribution arrangements; and meansfor allocating supplies from said inventory to a contracted entitysubmitting an order for supplies in accordance with an availabilityrecord of said supplies for said contracted entity.
 15. The system ofclaim 14 further comprising means for allocating portions of saidinventory to contracted entities submitting orders for said supplies inaccordance with availability records of said supplies for saidcontracted entities.
 16. The system of claim 14 wherein saidavailability records include one or more priority criteria determined inaccordance with said distribution arrangements between said supplier andsaid contracted entities.
 17. The system of claim 16 wherein saidpriority criteria may comprise one or more of the following factors:pricing of said supplies; availability of supplies; quality of supplies;history of dealings with said supplier; locations of said supplier;responsiveness of said supplier; and, delivery timing.
 18. A system forselectively apportioning inventories of supplies of a plurality ofsuppliers among a plurality of contracted entities having distributionarrangements with said plurality of suppliers, comprising: means forcreating records of supplies received in said inventories; means forcreating availability records of said received supplies from saidrecords of receipt for said contracted entities in accordance with saiddistribution arrangements; and means for allocating supplies from saidinventories to said contracted entities submitting orders for saidsupplies in accordance with availability records of said supplies forcontracted entities.
 19. The system of claim 18 wherein saidavailability records include one or more priority criteria determined inaccordance with said distribution arrangements between said suppliersand said contracted entities.
 20. The system of claim 19 wherein saidpriority criteria may comprise one or more of the following factors:pricing of said supplies; availability of supplies; quality of supplies;history of dealings with said supplier; locations of said supplier;responsiveness of said supplier; and, delivery timing.
 21. The system ofclaim 14 wherein said records are created and maintained by saidsupplier.
 22. A system for selectively apportioning inventories ofsupplies of a plurality of suppliers for a contracted entity which maysubmit orders for said supplies, in which said contracted entity hasdistribution arrangements with said suppliers, and said suppliers haveavailability records of said supplies for said contracted entities inaccordance with said distribution arrangements, wherein saidavailability records include priority criteria, comprising: means foridentifying distribution arrangements of said contracted entity withsaid suppliers for said supplies; means for obtaining availabilityrecords for said supplies from said suppliers; and means for submittingorders for selected amounts of said supplies to one or more selectedsuppliers in accordance with said priority criteria of said availabilityrecords.
 23. The system of claim 22 in which said distributionarrangements of said contracted entity include a precedence rating foreach supplier; and wherein said contracted entity obtains availabilityrecords from said suppliers in precedence order.
 24. The system of claim22 in which said distribution arrangements of said contracted entityinclude precedence ratings for said suppliers; and wherein saidcontracted entity places orders with said suppliers in precedence order.25. The system of claim 22 wherein said suppliers include othercontracted entities that have distribution arrangements with othercontracted entities.
 26. The system of claim 14 wherein saiddistribution agreements indicate a period of time indicating enforcementof said distribution arrangement.
 27. A computer program product for usein a computer system operatively coupled to a computer readable memory,the computer program product including a computer-readable data storagemedium tangibly embodying computer readable program code for directingsaid computer to selectively apportion inventory of supplies of asupplier to contracted entities having distribution arrangements withsaid supplier, said computer program product comprising code forinstructing said computer system to create a record of supplies receivedin said inventory; code for instructing said computer system to createavailability records of said received supplies from said record ofreceipt for said contracted entities in accordance with saiddistribution arrangements; and code for instructing said computer systemto allocate supplies from said inventory to a contracted entitysubmitting an order for supplies in accordance with an availabilityrecord of said supplies for said contracted entity.
 28. The computerprogram product of claim 27 further comprising code for instructing saidcomputer system to allocate portions of said inventory to contractedentities submitting orders for said supplies in accordance withavailability records of said supplies for said contracted entities. 29.The computer program product of claim 27 wherein said availabilityrecords include one or more priority criteria determined in accordancewith said distribution arrangements between said supplier and saidcontracted entities.
 30. The computer program product of claim 29wherein said priority criteria may comprise one or more of the followingfactors: pricing of said supplies; availability of supplies; quality ofsupplies; history of dealings with said supplier; locations of saidsupplier; responsiveness of said supplier; and, delivery timing.
 31. Acomputer program product for use in a computer system operativelycoupled to a computer readable memory, the computer program productincluding a computer-readable data storage medium tangibly embodyingcomputer readable program code for directing said computer toselectively apportion inventories of supplies of a plurality ofsuppliers among a plurality of contracted entities having distributionarrangements with said plurality of suppliers, said computer programproduct comprising: code for instructing said computer system to createrecords of supplies received in said inventories; code for instructingsaid computer system to create availability records of said receivedsupplies from said records of receipt for said contracted entities inaccordance with said distribution arrangements; and code for instructingsaid computer system to allocate supplies from said inventories to saidcontracted entities submitting orders for said supplies in accordancewith availability records of said supplies for contracted entities. 32.The computer program product of claim 31 wherein said availabilityrecords include one or more priority criteria determined in accordancewith said distribution arrangements between said suppliers and saidcontracted entities.
 33. The computer program product of claim 32wherein said priority criteria may comprise one or more of the followingfactors: pricing of said supplies; availability of supplies; quality ofsupplies; history of dealings with said supplier; locations of saidsupplier; responsiveness of said supplier; and, delivery timing.
 34. Thecomputer program product of claim 27 wherein said records are createdand maintained by said supplier.
 35. A computer program product for usein a computer system operatively coupled to a computer readable memory,the computer program product including a computer-readable data storagemedium tangibly embodying computer readable program code for directingsaid computer to selectively apportion inventories of supplies of aplurality of suppliers for a contracted entity which may submit ordersfor said supplies, in which said contracted entity has distributionarrangements with said suppliers, and said suppliers have availabilityrecords of said supplies for said contracted entities in accordance withsaid distribution arrangements, wherein said availability recordsinclude priority criteria, said computer program product comprising:code for instructing said computer system to identify distributionarrangements of said contracted entity with said suppliers for saidsupplies; code for instructing said computer system to obtainavailability records for said supplies from said suppliers; and code forinstructing said computer system to submit orders for selected amountsof said supplies to one or more selected suppliers in accordance withsaid priority criteria of said availability records.
 36. The computerprogram product of claim 35 in which said distribution arrangements ofsaid contracted entity include a precedence rating for each supplier;and wherein said contracted entity obtains availability records fromsaid suppliers in precedence order.
 37. The computer program product ofclaim 35 in which said distribution arrangements of said contractedentity include precedence ratings for said suppliers; and wherein saidcontracted entity places orders with said suppliers in precedence order.38. The computer program product of claim 35 wherein said suppliersinclude other contracted entities that have distribution arrangementswith other contracted entities.
 39. The computer program product ofclaim 27 wherein said distribution agreements indicate a period of timeindicating enforcement of said distribution arrangement.